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November 12, 2014

Rakuten-owned online video service Wuaki.TV has discontinued its subscription service ‘Wuaki Selection’ on 31 October. Instead Wuaki.tv is planning to focus on digital retail and rental movies and TV shows, taking the opportunity to build a content library available on a range of connected living room and mobile devices.

Wuaki.tv was established in Spain at the end of 2010 offering transactional movie content. It was later acquired by Rakuten, Japanese e-commerce group. Wuaki.tv added SVOD proposition Plan Premium in July 2012. Service expanded to the UK in July 2013 with transactional and SVOD offers. Wuaki.tv’s most recent launches include Germany and France in November 2014. German and French stores offer the transactional service only.

Our analysis

As IHS mentioned in a previous Market Insight (see ‘Rakuten brings Wuaki.tv to the UK’ from July 2013), in the UK Wuaki.tv entered a developed market with very strong local and international competitors.

Wuaki.tv entered the UK market at a time at which Netflix and Amazon already had over 2m subscribers combined. At the end of 2014 IHS expects Netflix alone to reach 3.3m subscribers, while Amazon, after revising its business model, is expected to bring its video service to more than 1.4m Amazon Prime users. In addition to online services, there over 2.6m consumers regularly use Sky Go and almost half a million pay BSkyB’s standalone service Now TV. Surviving in such a challenging market requires a number of costly factors, content proposition being key.

Wuaki.tv struggled to expand its subscription content proposition. Exclusive movie rights are split between BSkyB (which holds first subscription window rights to films from all of the Hollywood Major studios) – available to consumers via Sky Go and Now TV – and digital services Amazon Instant Video (which has Studio Canal films in the first subscription window) and Netflix (which offers Lionsgate and MGM first subscription window titles). Competing with market leaders for exclusive rights is a complex and expensive task. Even international giants like Netflix and Amazon are not always in a position to compete with incumbent exclusive rights holders such as Sky, and partly because of this, they have shifted into producing their own content, which has thus far turned out to be a successful strategic move.

Unwilling to compete on such a scale left Wuaki.TV with a small catalogue of titles available on its subscription plan, a lack of exclusive film rights and combined with the no in-house production, the success of Wuaki.tv’s subscription plan was very limited.

However, Wuaki.tv is maintaining its digital rental and retail service for movie and TV content. The company plans to focus on developing its transactional content catalogue, available across a wide range of connected and mobile devices. It is currently available on LG, Samsung, Panasonic Smart TVs, iOS tablets and smartphones, Android tablets, Xbox 360 and Xbox One consoles, and via the new EETV box.

Over the course of the year since the launch in 2013, Wuaki.tv has been adding various smart TV platforms to the list of supported devices. The company recently reported a 65% increase in the number of movies and TV being streamed via smart TVs since the introduction of the native apps. Currently, as Smart TVs are independent of the current transactional video leaders (Apple, Microsoft, Google), they provide an opportunity for alternative outlet for transactional services to compete – albeit one which brings them closer into conflict with the set-top box-based players of the pay TV sector.